COMM390 – ASSESSMENT 1

Newspaper Article Analysis

Systems Thinking and Corporate Governance in “Meeting of Minds Sparks Hope For Aborigines”

Chelsea Fraser

3647213

The article, “Meeting of Minds Sparks Hope for Aborigines” by Natasha Robson demonstrates how the application of certain concepts and ideas which are often more closely associated with commerce and business thinking can be applied to different situations to achieve a beneficial outcome and/or a greater understanding of a particular issue. In this instance the concepts of systems thinking and corporate governance can be applied to develop a system under which the Aboriginal people are able to become economically sustainable in their own right rather than having to rely on the Australian Government.

Article Outline
Robson’s article, published May 18 2013 details the development of the relationship between Warren Mundine, a senior Aboriginal leader and political activist and Tony Abbott, then Aboriginal affairs spokesperson for the Coalition.
The article details how Mundine, a staunch Labor party supporter developed a prosperous and beneficial relationship with Tony Abbott during the period dated from 2008. Being of different political associations, Mundine believed that they would have little in common. However, over time and the development of a relationship between himself and Abbott, many meaningful conversations have been had with the intention of improving the standard of living for Aboriginal people, including education, health care and wealth.

Mundine’s experiences in private industries, serving on corporate boards and working with mining companies as well as closely studying the developing prosperity of nations such as South Korea and Turkey enabled him to determine that development was key to ensuring the prosperity and autonomy of the Aboriginal people. This development idea is the opposite of the current plan for Aboriginal betterment whereby the Aboriginal people are dependent on the government.

Theoretical Concept 1: Corporate Governance
The first concept that can be applied to this case is Corporate Governance. Corporate governance is defined as the set of processes, customs, policies, laws and institutions affecting the way a corporation (or company) is managed. The OECD identifies and provides example of the principles of corporate governance as:
• Rights and equitable treatment of shareholders: Organizations should respect the rights of shareholders and help shareholders to exercise those rights.
• Interests of other stakeholders: Organizations should recognize that they have legal, contractual, social, and market driven obligations to non-shareholder stakeholders, including employees, investors, creditors, suppliers, local communities, customers, and policy makers.
• Role and responsibilities of the board: The board needs sufficient relevant skills and understanding to review and challenge management performance. It also needs adequate size and appropriate levels of independence and commitment
• Integrity and ethical behaviour: Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making.
• Disclosure and transparency: Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information.
Legal regulations, such as disclosure laws as well as industry specific and organisation specific policies such as accounting standards can aid in the corporate governance process. The United Nations Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting produced an internationally agreed upon Guidance on Good Practices in Corporate Governance Disclosure which lists over fifty separate items of disclosure. The items can be assigned to one of five categories:
• Auditing
• Board and management structure and process
• Corporate responsibility and compliance
• Financial transparency and information disclosure
• Ownership structure and exercise of control rights.

Both internal and external controls can be put in place to ensure that activities remain efficient, are morally and ethically correct and all potential agency conflicts can be avoided. Internal controls that can be implemented include:
• Monitoring by the board of directors
• Internal control procedures and internal auditors
• Balance of power
• Remuneration
External corporate governance controls include:
• Competition
• Government regulations

It is important to consider corporate governance not only in terms of financial, accounting and agency conflict issues but also in terms of the social impact issues such as the environment, social responsibility and social development and improvement. With the increased importance being placed on corporate social responsibility it is important that organisations have in place controls and systems to ensure that these areas are also continually monitored.

Corporate Governance and “Meeting of Minds Sparks Hope for Aborigines”
Corporate governance can be applied to the article “Meeting of Minds Sparks Hope for Aborigines” in numerous ways.

The first of these is that at the current point in time, the Federal government can be viewed as the organisation acting as a control and also the “board of directors” for the Aboriginal community. The key concern regarding this feature is the effectiveness of the government as the board of directors of the Aboriginal community. As Mundine is reported as stating in regards to the mentality of the Aboriginal people, the government has assumed all risk and as a result an attitude of “the government will fix it” has developed within these communities. Additionally, the “board of directors” were not actively involved in the community as indicated by Mundine’s statement "These people that fly in and fly out from Sydney and the suburbs of Melbourne and campaign for these things have left a very bitter taste in Aboriginal people's mouths, because when they went back to their suburbia, the only people still living in poverty were indigenous people.". This demonstrates that the interests of stakeholders, in this case the Aboriginal community, were ignored. Under Mundine’s proposed structure, the Aboriginal people will gain autonomy and be able to be their own “board of directors” with the government and private industries only acting as an external control rather than management.

Secondly, under the Rudd government, targets, time frames, budgets and outcomes were developed to which various key organisations could be held accountable and performances benchmarked against. These included outcomes based on health, education and employment. Despite being lost in bureaucracy, this was the first time that targets were actually set. This shows a great shift in the corporate governance in regards to Aboriginal affairs, something which Mundine recognised and is keen to ensure continues in the future. By establishing these outcomes and benchmarking targets, the performance of the Australian government on Aboriginal affairs was for the first time able to be quantitatively measured and assessed, holding those involved accountable, a key cornerstone of corporate governance.

Theoretical Concept 2: Systems Thinking
The second concept that can be applied to this case is Systems Thinking. Systems thinking is the process of understanding how things, regarded as systems, influence one another within a whole. In an organisational context, the system consists of people, structures and processes that work together to ensure that an organisation remains viable.
Systems thinking had been defined as an approach to problem solving, by viewing “problems as parts of an overall system, rather than reacting to specific parts, outcomes or events and potentially contributing to further development of unintended consequences. Systems thinking is not one concrete process but rather a set of practices within a framework that is based on the belief that the component parts of a system can be nest understood in the context of relationships with each other and within other systems, rather than in isolation. Systems thinking focuses on cyclical rather than linear cause and effect.

Key to systems thinking is an understanding of what constitutes a system. Oxford Dictionary defines system as “a set of things working together as parts of a mechanism or an interconnecting network; a complex whole” and “a set of principles or procedures according to which something is done; an organised scheme or method”.

Within the systems thinking approach, there are multiple tenents, these include:
• Interdependence of objects and their attributes
• Goal seeking
• Regulation and feedback.
• Hierarchy
• Differentiation
• Convergence
• Divergence

An example of systems thinking in a business environment is:
• An organisation noticed that its customer service team was being overloaded with problems that needed to be solved.
• As a result of this, the team’s agenda was full, not allowing them adequate time to rectify each problem
• This resulted in a scattered focus from the team as every team member was working on multiple problems at the one time
• The more scattered the team’s focus became, the lower the level of shared understanding
• The lower the level of shared understanding and collaboration, the more superficial the treatment of problems became.
• Due to the superficial treatment of problems, more problems arise, leading the team to have more work, repeating the cycle and causing a snowball effect.

Systems Thinking and “Meeting of Minds Sparks Hope for Aborigines”
Systems thinking is clearly evident within the article “meeting of Minds Sparks Hope for Aborigines”, in particular when looking at improving the quality of life of the Aboriginal people.

Mundine notes that personal autonomy has “been so eroded within individuals from generations of Aboriginal families, leading, at its endpoint to social chaos”. This is an example of a systems thinking approach as it demonstrates the cycle many Aboriginal people are stuck in the middle of, many through no fault of their own.

Changes in the sentiments of Aboriginal people over their treatment has seen a significant shift in the systems thinking process of the next generation of Aboriginal leaders who “are over tier communities being dysfunctional, are over their communities being treated on the fringe and want to engage in the education system and commercial life in Australia” . As Mundine notes, “right now, we are seeing more aborigines going into private schools; you’re seeing things like GenerationOne where corporate Australia has stepped up and offered thousands of jobs for indigenous people. You see lots of money pouring into the education area from the private sector, and indigenous people are grabbing at it with both hands”. This change in thought process has seen the creation of a positive system in relation to personal autonomy for the Aboriginal people.

The changes in the willingness of Aboriginal people to seek out education and employment creates a new system within Aboriginal communities: through increasing the education of a few, the community will benefit in various ways from increased access to health care, to increased economic prosperity, allowing more Aboriginal children to gain an education and allow many to break the negative system in which they were trapped. This is indicative of goal seeking systems thinking, whereby, driven by a defined goal; ending indigenous disparity; systems can change and adapt.

It is clear from Mundine’s ideas that he has witnessed the benefits of systems thinking and processes during his time in the private sector and in other countries and has identified a systems thinking approach as a method for improving the autonomy of the Aboriginal people, “stemming the tide of social catastrophe that sweeps across the indigenous underclass”.

Conclusion
Warren Mundine’s push for an anti-welfare, pro-development and privatisation of services in Aboriginal communities from the previous human rights perspective will result in great changes in both corporate governance and systems thinking within Aboriginal communities across Australia. In order for these changes to continue and the disparity between Aboriginal and non-Aboriginal people to continue to decrease, leaders from both Aboriginal and non-Aboriginal communities, in both the private and public sector need to continue to engage in conversation to promote opportunities for Aboriginal people. Through “taking people on a journey with a vision and a narrative”, Mundine and Abbott will be able to change the lives of many Aboriginal communities.

It is clear that concepts most commonly associated with business practices can be used to enhance the everyday lives of people from various backgrounds. Concepts such as corporate governance and systems thinking can be adapted and manipulated to suit many diverse situations and provide a useful framework for social, economic and political advancement. These tools are invaluable to any organisation, especially during times of significant change and/or upheaval, such as what is presently occurring in Australia’s Aboriginal communities.

References